Chinese National Sentenced in Theft of NY Fed Code

A computer programmer who worked for the Federal Reserve Bank of New York was sentenced to six months of home confinement after he admitted in May to stealing proprietary computer software from the bank.

European Pressphoto Agency

The Federal Reserve Bank in New York

Federal prosecutors alleged that Bo Zhang, 33 years old, illegally copied code for a software system known as the Government-wide Accounting and Reporting Program while working as a contract employee for the Fed in summer 2011 and transferred it to his home computer, a personal laptop and his private office computer.

The computer software is used principally to help track the U.S. government’s finances and is owned by the U.S. Department of Treasury. It cost about $9.5 million to develop.

“I just want to apologize to the government, the court, my previous employer, my clients for causing this mess,” Mr. Zhang said.

Mr. Zhang, a Chinese national living in Queens, pleaded guilty in May to theft of government property and immigration fraud. He had faced as much as a year to a year and a half in prison on the charges under federal sentencing guidelines.

At his plea in May, Mr. Zhang also admitted to submitting false documents to immigration authorities on more than one occasion to help foreign nationals obtain visas to enter and work in the U.S.

U.S. District Judge Paul Gardephe said there was no evidence that Mr. Zhang shared the computer code with anyone else or compromised the security of the software.

“What I find troubling here is the continuing acts of illegal conduct,” the judge said.

The judge ordered that Mr. Zhang serve six months home confinement as part of a sentence of three years of supervised release. Mr. Zhang will likely be deported upon the completion of his sentence.

Mr. Zhang is one of several computer programmers accused in recent years of stealing proprietary software code for government and business systems.

Sergey Aleynikov, a former Goldman Sachs Group Inc. programmer, was convicted in December 2010 on federal charges that he stole the investment bank’s secret computer code for its high-speed trading system. His conviction was overturned by a federal appeals court in February.

However, the Manhattan District Attorney’s office has since brought separate state charges against him. Mr. Aleynikov has denied wrongdoing and has asked that the state charges be thrown out.

Samarth Agrawal, a former Societe Generale SA computer programmer, was sentenced to three years in prison in February 2011 for the theft of the French bank’s high-speed trading computer code.

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